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MOUNT KISCO, N.Y. -- Mt. Kisco Associates, L.P., the landlord of the former Borders site in downtown Mount Kisco, will let its property be foreclosed after giving up contesting a lawsuit with the holder of its mortgage.

The decision is part of
a May 30 deal
– it was filed with the state Supreme Court on Tuesday – agreed to with the holder of the property's mortgage. The holder, an entity called GCCFC 2007-GG11 Kisco Retail, LLC, has been managed by LNR Partners, LLC, a Florida company that is the special server for the mortgage.

The foreclosure lawsuit accuses Mt. Kisco Associates of defaulting on the mortgage, which was agreed to in September 2007 with a principal of $6.3 million. The mortgage has a maturity date of Sept. 6, 2017 and carries an interest rate of 6.815 percent. Only payment on the interest was required for the first five years.

The deal, which was signed by attorneys for both sides, states that a total of $9,148,798.38 is owed to the plaintiff as of Feb. 6. In addition to the mortgage debt, the figure includes interest of more than $1.4 million, more than $21,000 worth of late charges, a pre-payment premium of nearly $1.4 million and attorney's fees of more than $96,000.

As part of the settlement, the landlord has also agreed to waive a series of legal defenses that it gave in response to the lawsuit.

A draft foreclosure order, which a judge would approve, was also submitted. The order calls for holding an auction of the property, although no date and place are given.

Records show a wide range of valuations for the site over time.

A 2007 investment prospectus containing details about the loan and other mortgages mentioned an appraisal, which was done that year, valuing the site at $8.5 million. However, Mount Kisco's assessment rolls for recent years have shown full market values – estimates of what the property could sell for – to be less than the loan's value. Mount Kisco's most recent full market value for the site is $5,372,928. The property has an assessed value of $972,500.

A foreclosure could also impact the village, which has leased parking space on the parcel since 1995. Mayor Michael Cindrich, who gave an update about the foreclosure case following a recent Village Board of Trustees meeting, discussed the parking lease briefly but was unsure what will happen with the arrangement.